Property News Update - July 2021

Cowboy builders face court claims going back 15 years

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Landlords with property who have suffered the consequences of bungling tradespeople will have 15 years to sue for compensation when the new Building Safety Bill has safely navigated Westminster. Housing Secretary Robert Jenrick announced the reform when the Bill was published earlier this month. Changing the time limit is also retrospective, so victims of lousy work can look back up to 15 years to bring the cowboys to justice. The measure is a by-product of legislation introduced in Parliament to stop another tragedy like the Grenfell Tower fire from happening.

Big freeze on throwing out white goods

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Dealing with broken down fridges, freezers and washing machines should become a lot easier for landlords from this month. From July 1, new government energy efficiency regulations demand makers must supply spare parts to consumers. The law is a step in making electrical appliances at home and in the workplace more efficient to run. The new rules should stop the complicated arrangements landlords and letting agents must make to deliver and instal new appliances. The hope is fewer white goods will end on the scrap heap and bring down costs for consumers.

Buy-to-let property lenders turn up the heat on borrowers

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Nationwide's property investment arm, The Mortgage Works (TMW), has joined the list of buy-to-let lenders requiring rented homes to have at least an Energy Performance Certificate C-rating to get the best rates and deals. TMW recently launched an 85 per cent loan-to-value buy to let loan to comply with a government order that all property investments should have at least the C-rating by 2030. Currently, rented homes must have a rating of D or above.

Taxman rings the changes over CGT refunds

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HM Revenue & Customs has put a workaround in place for property investors who overpay capital gains tax on the sale of a privately rented home. The online CGT service and self-assessment returns have a flaw that doesn't allow landlords to claim a refund for overpaying CGT online and then correcting the figure on a self-assessment. Instead, HMRC wants landlords to phone their tax office to ask for a refund.

The taxman will try and keep the money by offering to offset the amount against other tax liabilities. Unofficially, the mix-up is thought to result from the HMRC system's inability to refund payments to bank cards.

Property prices surge yet again

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House prices were up 9.6 per cent year-on-year in May. This is according to the latest data from the Office of National Statistics (ONS). The price of an average home dropped to £255,000 from March's record high of £266,000. This is according to May's data, the latest available. However, the slowest rate of house price growth was in London, which saw them go up 5.6 per cent.

The ONS explained the stamp duty holiday triggered the massive rise in values over recent months. This is due to sellers ratchet up their asking price, knowing buyers are making a saving. "These changes in the tax paid on housing transactions may have allowed sellers to request higher prices as the buyers' overall costs reduced," says the ONS report."

As the tax breaks were originally due to conclude at the end of March 2021, it's likely that this inflated March's average house prices as buyers rushed to ensure their house purchases completed ahead of this deadline. "House prices are growing quickest in the North West. Sellers saw valued soar by 15.2 per cent in the past year.

Property rents are stuck in a rut

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House prices may be rising, but rents are stuck in a rut. Buy to let rents were up 1.2 per cent, but the cost of living increased by 2.4 per cent over the same period. At the same time, too many tenants are chasing too few homes, says the ONS.The rate of year-on-year rent increases has hardly changed since January 2020. "Growth in private rental prices remained broadly flat between November 2019 and the end of 2020.

However, the beginning of 2021 has seen rents prices slow, driven by prices in London," says the ONS rent report. "In the 12 months to June 2021, rental prices excluding London increased by 1.8 per cent. Up from 1.7 per cent in May 2021. London private rental prices decreased by 0.1 per cent in the 12 months to June 2021, unchanged since May 2021."Since November 2020, private rental price growth in London has slowed. As a result, London's rental price growth in June 2021 of - 0.1 per cent is lower than any other English region.

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